I've been spending a lot of time looking at the e-commerce agency space lately. Talking to owners, reviewing listings, reading what brokers and buyers are saying, listening to podcasts from people deeper in this world than I am.

Here are things I keep noticing.

This one surprised me at first. PE firms are actively rolling up digital agencies, and not just the big ones. They're building portfolios of ecommerce-focused agencies, combining CRO, retention, paid media and web development under one roof.

The logic makes sense once you see it. Agencies have recurring revenue from retainers, predictable margins if run well and a client base that's already paying. For PE, that's a cash flow engine they can scale by bolting agencies together.

What this means if you run a smaller agency: the market above you is consolidating. That's not necessarily a threat, but it does change the landscape. Bigger groups will compete differently. They'll bundle services, undercut on price for enterprise clients and hire aggressively. If you're a 5-15 person shop, knowing this is happening around you matters for how you position the next couple of years.

This is the one I find most interesting. Agencies that have adopted AI into their delivery, whether it's for testing, reporting, content or analysis, are running leaner and with better margins. They're able to do more with smaller teams, which means their profitability per head is going up.

On the other side, agencies that haven't made that shift are starting to look different. Not worse necessarily, but less efficient. The gap between these two groups is growing fast.

From where I sit, this creates an interesting dynamic. An agency that hasn't adopted AI but has good clients, a solid team and consistent revenue isn't broken. It's just underoptimised. For the right person who understands how to implement those tools, that's an opportunity, not a problem.

Not every niche is feeling the same pressure. Some agency owners I've spoken to are genuinely optimistic, growing steadily, hiring, winning new accounts. Others sound tired. They've been running at full capacity for years, margins are thinning and the constant demand to evolve (especially around AI) is adding another layer of pressure on top of everything else.

The niches that feel the most heat tend to be the ones where deliverables are becoming easier to automate or commoditise. The niches that feel strongest are the ones where strategic thinking and client relationships drive the value, not just execution.

If I had to summarise what I'm seeing: the ecom agency market is going through a restructuring. PE is consolidating the top end. AI is reshaping the middle. And a lot of owners who built great businesses over the past 5-10 years are starting to think about what comes next.

None of this is dramatic or urgent. But if you own an agency, it's worth paying attention to where you sit in this picture. The decisions you make now about AI adoption, positioning and team structure will shape what your options look like in 18 months.

I'm still learning and I don't have all the answers here. If you're an agency owner, a broker or someone else looking at this market, I'd love to compare notes. Reply and tell me what you're seeing. Am I reading this right?

Speak soon,

Jordan